An increasing number of people either cannot afford, or are not prepared, to pay for the funeral of their loved ones, forcing councils to foot the bill.

A conference organised this month by the Chartered Institute of Environmental Health will hear evidence that the economy is now having an effect on people's willingness to pay for relatives' ceremonies. A survey of 348 environmental health chiefs in England and Wales found that almost 3,000 public health funerals were organised last year, in line with the previous three years. But the survey found 51% of the authorities had observed an increase in family or friends unwilling or unable to contribute to the costs of a funeral.

David Kidney, head of policy at the institute, said that his organisation was concerned about the rise in the number of people declining to meet the costs of their loved ones' public health funerals. "It's partly a demographic issue – people are living longer," Kidney said. "The money they thought would see them through their lives expires before they do. And it's also down to economics – families and individuals can't afford the funeral."

Under the Public Health Act 1984, councils pay for a funeral if someone dies outside a hospital and there is no one available to immediately foot the bill. A local authority will later attempt to reclaim the costs from the deceased's family. But finding the relatives can prove time-consuming and if there is no estate left those that are found may be unwilling or unable to foot the bill.

"Each one of these funerals is a tragedy," said David Rogers, chair of the Local Government Association's community wellbeing board. "You would hope when someone died there would be someone there, either family or friends to help make the arrangements, but sadly this is not always the case."

Last year the average council had to pay for five funerals at an average cost of £950. However, there are acute regional disparities.

A small number of authorities dealt with a significantly higher number of public health funerals, with one council organising 266 last year.

Just over three-quarters of public health funerals conducted in 2010/11 were for men. More than half were for those aged over 65. In total, councils spent more than £2m on public health funerals last year.

The institute warns that the funeral industry is experiencing rising cost pressures due to land shortages. It said rising demand for land and redevelopments is causing a shortage of available ground for burials with the result that there has been an increase in exhumations.